Pybus, Inc. is considering issuing bonds that will mature in 19years with an annual coupon rate of 12 percent. Their par value will be $1,000 and the interest will be paid semiannually.

Pybus, Inc. is considering issuing bonds that will mature in 19years with an annual coupon rate of 12 percent. Their par value will be $1,000 and the interest will be paid semiannually.

150 150 Support

Pybus, Inc. is considering issuing bonds that will mature in 19years with an annual coupon rate of 12 percent. Their par value will be $1,000 and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 7 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 8 percent. What will be the price of these bonds if they receive either an A or a AA rating?

The price of the Pybus bonds if they receive a AA rating will be_______?

The price of the Pybus bonds if they receive a A rating will be________?

Facebooktwittergoogle_plusredditpinterestlinkedinmail